1031 Exchange

You've sold appreciated real estate and you want to defer the taxes. But what if you could also gain diversification and potential liquidity? A traditional 1031 exchange into a single replacement property still leaves you concentrated in one asset, one market, one set of risks. Section 1031 lets you reinvest the proceeds from appreciated commercial real estate into like-kind property without recognizing a taxable gain. A Delaware Statutory Trust, or DST, holds title to professionally managed institutional-quality real estate. Since 2004, the IRS has recognized DST interests as qualifying 1031 replacement property. Your DST interest may convert [...]

Looking to boost after tax income in your 1031 exchange consider moderately leveraged multi-family DSTs over debt-free net lease DSTs? Here's why debt-free net lease DSTs like dollar stores or pharmacies offer initial stable predictable income but that income may be fully taxable and it depends on one lease. Multifamily DSTs spread income across hundreds of tenants reducing risk moderate leverage amplifies tax benefits you could increase your depreciation potentially shielding all income from taxes for years. Debt-free net lease DSTs like a single tenant Walgreens may offer initial stability but rely on one lease with little [...]

For 1031 exchange investors Delaware Statutory Trusts or DSTs offer tax deferral and passive income but not all DSTs are equal. Here's why: 1. Diversified Revenue Multi-family DSTs spread income across many leases if one tenant leaves in a 200 unit property a 2% vacancy barely dents your cash flow. Single tenant DSTs like a Walgreens rely on one tenant if they go bankrupt you lose all income until a new tenant is found. 2. Bankruptcy Protection Single tenant DSTs are vulnerable to tenant failure. Think Sears or Rite-Aid. Multi-family DSTs reduce this risk with hundreds [...]